NFTs: a solution for art trading in the digital age?

As NFTs are gaining traction, what does this mean for the art market?

Jasmine Shaw
2nd December 2021
Image Credit: Flickr
Non-fungible tokens – more commonly known as NFTs – can be understood as certificates of authenticity that are attached to digital assets. Because they are “minted on the blockchain”, a network of computers that records information in a way that is near impossible to hack, these tokens can be reliably authenticated. Over the past year, NFTs have gained traction in the art world, bridging a gap between the traditional art market, where authenticity is paramount, and digital art, which can often be replicated at the push of a button. NFTs allow the unique ownership of a digital asset, a revolutionary phenomenon indeed, yet the effect of NFT trading on the art market may not be as significant as it seems.

Art can be valued according to its cultural and social impact, valuable to its owner or viewer as an experience, yet it is often valued as a currency, whether social or monetary. Art’s function as a signifier of social status and an asset to be bought comes to a head in NFT trading, with proponents claiming “bragging rights” as a reason for spending hundreds of thousands of dollars on tokens. In this way, NFTs raise the question of whether the experience of viewing an artwork or its material worth is more important, but this dispute is nothing new; in fact, it is much the same as that surrounding various modern art pieces.

In the words of Grayson Perry, “When we talk about the culture we consume, it is often a dance around how we wish to be seen.” The perfect example of this is Yayoi Kusama’s Infinity Mirror Rooms, dubbed “Instagram exhibits” for their popularity with selfie-takers. This is not to say that those who post pictures taken in Kusama’s Rooms on social media do not also appreciate the cultural and social value of her work, but publicising one’s appreciation of such a famed artwork is certainly an attraction, and a factor in their popularity. Here, art functions primarily as a kind of social currency, an indicator of status, rather than an experience.

Similarly, while the monetary value of art can be a way of translating its social and cultural significance into material value, the popularity of an artwork undoubtedly influences its price. In 2020, for example, individual spots cut from Damien Hirst’s Spots sold for $480 each, and were later “flipped” on eBay for up to $3,500, while the remaining paper, aptly titled 88 Holes, sold for a further $261,400. Without debating the cultural and social value of these coloured circles of paper, or indeed their absence, one cannot deny that the astounding profit generated by this series stems from the fact that to own a spot is to belong to the fashionable elite.

“When we talk about the culture we consume, it is often a dance around how we wish to be seen.”

Grayson Perry

In the modern high-end art market, art is often a status symbol and a commodity to be traded, and NFTs are valued in much the same way: as things to be owned. After all, when Nyan Cat, for example, can be viewed freely online and replicated pixel for pixel, free of charge, what is the advantage of owning an original copy, such as was sold for $590,000 in February of this year?

This is the question raised by Geoffrey Huntley, the Australian artist and programmer who, earlier this month, created The NFT Bay, a piracy website where users can download the artwork associated with every NFT in existence to date on two major cryptocurrency networks. The collection includes Twitter founder Jack Dorsey’s first tweet, the original Doge meme and the viral image of Disaster Girl, a personal favourite, in which a young girl smiles to the camera in front of a burning building.

While The NFT Bay does not make available the tokens that prove ownership of these digital assets, users can still view and download a copy for free, since the actual images are not saved on the blockchain. In this way, Huntley's website highlights that the value of NFTs is invented, generated by a desire for ownership and the associated social “clout” rather than any real advantages.

The free replication and distribution of content online threatens to disrupt a system in which art is a status symbol, available only to the richest members of society. Under this system, the modern art market flourishes. NFTs epitomise the reduction of art to its profitability, extending this way of valuing art into the digital age, and we should be sceptical of this latest in a series of crypto trading booms.

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